'His death would plunge the country back into political crisis'

A well-wisher holds a picture of Thailand's King Bhumibol Adulyadej at the Siriraj hospital where he is residing, in Bangkok, Thailand, June 9, 2016.
Athit Perawongmetha/Reuters
The Thai King is in poor health — and that could pose risks to the country's political and economic situation.

Palace officials recently stated that King Bhumibol Adulyadej's health is "not stable," and that he was being prepped for haemodialysis, which is used to treat kidney failure.

"The failing health of the king adds another layer of uncertainty to an already highly unpredictable situation," argued Capital Economics' Krystal Tan and Gareth Leather in a note.

The situation "poses a key risk to the country's economy. His death would plunge the country back into political crisis, which in turn could push the economy into recession."

The military has twice overthrown the democratically elected government in Thailand over the last ten years — with the more recent one in May 2014. During that timeframe, the 88-year old monarch who has reigned since 1946 has played a "pivotal role... in maintaining the balance of power in Thailand's volatile political environment," according to the BBC.

As such, Tan and Leather argue that tensions could pick up after his death. Moreover, while economic growth has recovered since the coup in 2014, the economy and sentiment could be hurt by another rise in political uncertainty.

"...it is difficult to be upbeat about Thailand's medium-term outlook until the political picture becomes clearer. Unfortunately, with the king's health rapidly deteriorating, the situation may get worse before it gets better," the analysts concluded.

The Thai baht is down by 0.9% at 35.460 per dollar as of 11:13 a.m. ET.